MNI RBA Review-Sept 2025: Even More Data Dependent

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EXECUTIVE SUMMARY: 

• The RBA decided to leave rates at 3.6% in a unanimous vote, which was widely expected. Its tone was generally more cautious than in August and it is definitely keeping its options open regarding future decisions with Governor Bullock not committing to an easing or neutral bias. 
• The Board is concerned that market services inflation could be sticky, as has occurred overseas, while there are “signs that private demand is recovering” and that the labour market is “stable”. 
• Given heightened uncertainty, the updated growth and inflation outlook in the November staff forecasts will be key for the next decision. The Board stated it will update “its view of the outlook as the data evolve” signalling that it is even more data dependent. Q3 CPI is published on 29 October and September jobs data on 16 October 
• RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision. A 25bp rate cut in November is given a 35% probability, with a cumulative 11bps of easing priced by year-end.